Deepening concern about climate change among global corporate executives, together with signs that a slumbering “moderate middle” of companies is awakening to climate’s urgent threat, bodes well for corporate climate action, says a new report from management consulting giant Deloitte.

Following its spring survey of some 2,100 corporate executives (CxOs) from 27 countries, including Canada, Deloitte reports “signs of a shift in business climate action” that could swell to a sea change if the 56% of mid-level companies whose efforts remain incremental and siloed join the 17% that are seen as climate-mobilized.

A 10% increase over last year in the number of global CxOs “prioritizing and increasing investments in sustainability”, from 75% to 85%, alongside a near 10% increase in those who anticipate that climate change will have “a high or very high impact” on their companies’ strategies and operations over the next three years, are among the indicators Deloitte cites in its September report on the survey.

And few executives now see “trade-offs between business success and climate action,” Deloitte says. Today, “92% of CxOs believe their company can grow while reducing greenhouse gas emissions, and 90% believe the world can achieve economic growth while reaching climate change goals,” the survey found.

Higher Concern, Direct Experience

Just over three-quarters of respondents “report feeling concerned about climate change all or most of the time, indicating a high level of awareness and stress regarding its impacts,” a 14% increase over last year, writes Deloitte.

Some 45% of those surveyed reported direct experience this past year with either severe flooding or sea level rise, while 41% reported experience with extreme heat.

And 60% of companies “feel moderate to significant pressure from regulators to enhance their climate action efforts,” along with “substantial pressure” from their board members, management teams, shareholders, and investors.

More Climate Distress, Less Stakeholder Pressure

A whopping 85% of the 129 Canadian executives in the survey said they “worry all or most of the time” about climate change, a “sharp increase” from the 59% who said the same in 2023, The Canadian Press reports.

And that worry is translating into action. “Thirty-six per cent of Canadian executives surveyed said their companies significantly increased their investments in sustainability this year, compared with 13% in 2023,” writes CP. That level of action is also much higher than the global average amongst their peers: 16%.

Yet Canadian CxOs reported a decline in customer pressure to act on climate change. Only 39% said they’d seen pressure to do better on sustainability, compared to 58% last year—and a current global average of 59%.

Deloitte Canada said the survey was designed to measure corporate executives’ perceptions about climate action, not the perceptions or actions of stakeholders.

“I wouldn’t necessarily say that there is a lower concern by customers or stakeholders or clients out there,” Deloitte partner Henry Stoch, national leader of the sustainability and climate change practice in Canada, told The Energy Mix. “I would say there is likely a perspective from CEOs that that could be the case.”

The Canadian CxO responses to stakeholder pressure do show a consistent pattern that differs from their counterparts elsewhere. Whether they were thinking about board members, civil society, regulators, shareholders, banks, or customers and clients, Canadian executives reported feeling at least 10% less pressured than their global peers.

Obstacles to Progress

Some 21% of the CxOs in the international survey identified “a lack of sustainable solutions or insufficient supply of more sustainable inputs” as a “major barrier” to climate progress. Another 21% cited “the lack of political support and action for necessary change.”

“Without strong political backing, it can be challenging for businesses to make the substantial changes required to meet sustainability targets,” notes the Deloitte report.

Concern about alienating a subset of customers or employees, a focus on near-term challenges or demands, and lack of customer or client demand for sustainable goods and services also ranked as obstacles to climate action.

Mobilizing the ‘Moderate Middle’

“The landscape of climate action among businesses is highly uneven. While leading companies (17%) are driving change inside and outside their organizations, an even greater number (27%) have taken few, if any, of the most-impactful actions,” writes Deloitte.

In such an environment, it falls to the “moderate middle” (56%) to drive “broader and deeper action.” Deloitte says that “sleeping giant” could “tip the balance of corporate climate action and drive rapid change.”

And that tipping point could be near: 52% of executives in “moderate middle” companies predicted that climate change will have a high impact on their business over the next three years, with another 20% anticipating a very high impact.

The solution for businesses looking to take effective action on climate change is to “collaborate beyond the four walls of the business,” engaging with a “wide range of stakeholders—and even competitors—to amplify sustainability impacts,” writes Deloitte. “Collaboration across the supply chain can drive industry-wide improvements and foster innovation,” while “partnering with regulators can help shape supportive policies.”